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tv   First Business  KICU  January 10, 2013 4:00am-4:30am PST

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facebook stock suddenly surges. is that a sign to buy or sell? in today's cover story, a bumpy stretch for boeing. how the dreamliner mishaps will affect the jet maker in the long run. switching gears at the consumer electronics show - why automakers are stealing the spotlight. plus, oscar nominees come out today. our critic's predictions on who will score big with the academy this year. and, stocks one wall street firm calls sure bets. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's thursday, january 10th. i'm angela miles. in today's first look: snap back: after two sessions
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of selling, stocks rallied wednesday on the heels of better-than-expected earnings from monsanto and alcoa. investors are liking facebook. the stock surged above $30 wednesday on word the company will reveal a mystery product next tuesday. that's the highest its been since july, but still below the $38 ipo price. and, labor secretary hilda solis is resigning from her position with the obama administation. stocks made a comeback. jared levy of joins us now with some comments on that. what do you think? is this the beginning of something bigger out there jared? > > you know angie, the past couple of days have really been more sideways than anything. markets are trying to figure out where they go from here, and the answer lies in earnings. we are going to talk about a couple of them in just a second, but i think, coming out of q3, q4 expectations have come down, but that is going to be the market's telltale signal, and to be honest, i just think that we are in sort of a muddle-through
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period here, until we start to see those earnings - or, until we see some more action from the fiscal cliff negotiations that still are lingering. > what happens at financial firms with these earnings could tell us a lot about the market as you indicate. what about wells fargo, which comes out with earnings on friday? that is a stock you were watching. > > tomorrow's earnings report from wells fargo is going to be key, not just because wells fargo is part of the financial sector, which is expected to lead this season, but more importantly, wells fargo is the largest, i believe, originator of mortgages in the united states. they are going to be able to tell us not only how many mortgages they sold or wrote, but what they are sort of seeing out there in the credit markets. i think that will help us get more guidance to both the housing market and to help the consumer. so i am going to be listening closely to wells fargo's report, and i think a lot of folks out there could gain a lot of knowledge about the housing situation just by that report on friday. > jared, there are some happy faces out there now that facebook is trading higher these days. what do you think
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about this stock? > > you know, i am not convinced that facebook has done the right thing. don't forget, they too have to report earnings this quarter. you know, last quarter was not a good one for them. facebook has been going through a rough time. and i think facebook has got a lot of proving to do. there is a little bit more optimism now building. we are going to see if they can execute on their mobile platform and see how their advertising revenue is doing. i think right now if you bought facebook at $20, you would probably be looking to sell it at $30. if you bought it at $35, you know, i think you can hold on a little bit longer. i do believe there is some upside. but please, be careful, and realize, this is going to be a volatile stock, and they still are a big the evolving story that does not have a lot of definitive answers at this moment. > jared, always good to have you on the show. thank you. > > thanks angie. in our cover story, the boeing 787 dreamliner is causing some lost sleep. three separate malfunctions in three days has some investors concerned that the continuing pattern of glitches may lead federal aviation officials to take action. three 787 incidents in three
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days - wednesday in japan, a 787 on-board computer erroneously indicates problems with the aircraft's brakes. tuesday, a lithium-ion battery explodes aboard a 787 after it arrives in boston, sending smoke into the cabin. and monday, jet fuel leaks from a 787 in boston just before take-off. "none of these deal with the aerodynamics of the plane and are maintenance glitches. the fuel leak is bigger than a false positive on a computer, but i don't think there's fears of safety." still, these glitches are under ntsb investigation. wednesday, after boeing defended the aircraft saying the company has "extreme confidence" in its dreamliner, shares gained 3.2% after dropping more than 4.5% earlier this week. "we think boeing has $15 billion wrapped up in the 787, and they're getting single- digit operating margins on this
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product." boeing's price is about $200 million per plane. ten airlines have lined up to buy 800 of them. none of them listed here are backing out. so far, the faa has not taken action. "if the faa gets issues that public safety is at risk, you'll see action, but that hasn't happened because these are confined to 'technical issues" and has not crossed over to the issue of safety." another reason airline analysts say cancellations are unlikely is, in part, because the other option for most other airlines, airbus, has a six-year waiting list for aircraft. the aig board of directors decided not to sue the u.s. government over the 2008
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bailout. aig nearly collapsed after making huge bets on bad mortgage investments. the government rescued it with $182 billion. aig repaid the money, and the government made nearly $23 billion in the end. aig threaned a lawsuit, calling terms of the deal unfair to shareholders and the interest rate on the loan excessive. backlash over the lawsuit was building. one congressman issued a statement to aig: "don't even think about it." as herbalife preps to hold its investor meeting this morning, the sec is preparing an investigation into the company. reports the sec is opening a probe into herbalife. it follows recent accusations from hedge fund manager bill ackman that the business is a pyramid scheme. however, those comments aren't curbing the appetite of all investors. rival hedge fund third point yesterday reported an 8.2% stake in the nutritional supplement company. shares jumped 4% on the news, trading up to $41, as traders who were short the stock were forced to buy herbalife.
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drought is causing a crisis in winter wheat crops across the nation. according to the usda, much of the central and southern wheat belt is suffering from a severe lack of moisture. farmers in texas, oklahoma, kansas and sections of coloardo are eligible for low-interest emergency loans. president obama is expected to soon name jack lew the new head of the treasury department. lew currently serves as white house chief of staff, but is reportedly the president's pick to fill the role as head of the treasury which will be vacated by timothy geithner following the inaguration. lew has served as budget director under both president obama and president clinton. he is also a wall street alum, as citigroup's managing director before heading to capitol hill. talks on gun control led by vice president joe biden are underway, with the vp promising something will be done to avert mass shootings in america. "urgent action. and the president and i are determined to take action." biden is hosting a series of meetings with people from all
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walks of life to discuss gun control. that includes walmart, the nation's largest seller of guns and ammunition. earlier, it was reported a rep would not attend the meetings; but later the retailer said it would send an approriate representative. morgan stanley is cutting back on its senior staff in its latest round of job cuts. the firm will eliminate 1600 jobs from its securities division. cnn reports the cuts will mainly hurt the bank's senior employees. the bank plans to let go of investment bankers, traders and support staff in the division. it follows recent staff cuts at both citigroup and ubs. the darden company is cooking up management changes. darden, which owns popular chain restaurants olive garden, red lobster and longhorn steakhouse, just named 3 executives to top positions. darden had a bout of bad pr last year after admitting it was testing a system to cut worker hours to offset the cost of the affordable care act. the company relented following public push- back.
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mcdonald's is hoping italians will show the golden arches some love. mcdonald's is opening 100 locations in the european country. calling the euro crisis "temporary," mcdonald's' italian chief executive said the plan will create 3,000 jobs. along with its business in brazil, russia, china, and other countries, mcdonald's predicts its business in italy will grow over the next decade. a record number of people will be able to afford homes this year. that latest piece of encouraging news about the housing market comes from the national assocation of realtors. the group's index of housing affordability hit a record 194 in 2012. a reading of 100 indicates people earning a median income have exactly enough money to qualify for buying a median priced home. still, economists are concerned tight credit standards could put the brakes on home buyers. the irs is catching criticism for how it manages cases of
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identity theft. in a report issued to congress this week, a taxpayer advocate group accuses the irs of "falling short" in assisting victims of id theft. the group argues that the irs does not have the staff to handle the flood of cases it receives. cases of tax-related identity theft have spiked in recent years. in 2012, the irs received nearly 450,000 cases - a whopping 80% increase from 2011. the nissan leaf, once built exclusively in japan, will now be built in the u.s.a. starting this week, 300 autoworkers will begin production in smyrna, tennessee. nissan, however, is remaing mum on how many cars will be produced. sales of the leaf in the u.s. are being called disapointing, with just under 10,000 sold. meanwhile, sales of gm's electric hybrid, the chevy volt, topped 23,000 last year. apple may have a cheaper iphone in the works. according to the wall street journal, apple is considering creating a less expensive version of the popular device. the iphone would
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be made from less costly materials such as polycarbonite plastic or even materials recovered from used iphones. apple has not confirmed or denied the report. still to come, our resident film critic is here with his list of oscar picks. the films and actors that could make the cut this year are coming up in movies and money. but first, why automakers are adding a new curve to this year's consumer electronics show. chuck coppola has details after the break.
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(woman) 3 days of walking to give a break cancer survivor a lifetime-- that's definitely a fair trade. it was such a beautiful experience. (jessica lee) ♪ and it's beautiful (woman) why walk 60 miles in the boldest breast cancer event in history?
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because your efforts help komen serve millions of women and men facing breast cancer every year. visit to register or to request more information and receive a free 3-day bracelet today. it was 3 days of pure joy. ♪ and it's beautiful the consumer electronics show in las vegas is about the latest for consumers, but it's also where small companies can make a big splash. that's happening with a small utah company called hzo. marc saltzman, a tech contributor from usa today, joins us. mark, i have to ask you, you showed us yesterday about this technology, a thin coating that protects electronics from water being applied to a sony phone. is sony's agreement with hzo exclusive so far as you know? > > so far as i know it is not hzo's technology that sony is using, it's their own proprietary way of protecting the circuitry, and they have got tempered glass on both the front and the back of their android z - their xperia z smart
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phone is what you're referring to - and it does allow you to submerge it in water for up to 30 minutes, and that is good news for people who have accidently dropped their phone in a toilet or the sink. but hzo is a separate company altogether that i believe is inking deals with various smartphone manufacturers, and that does apply a thin coating to the internal circuitry of smart phones at the manufacturing level - so it's not something consumers do. but i believe that they are not exclusive to any one manufacturer at this point in time. i remember seeing them at the 2011 ctia wireless show and being impressed with their technology. > you know mark, there are eight automakers at this year's ces. six were there last year. why are we seeing automakers in such great numbers at the ces? > > it is about time. we have had lots of tech in the home, at work, and even in our pocket, but automobiles, vehicles, have trailed behind in the tech scene. finally we are seeing a lot more technology -
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everything from augmented reality - we are seeing superimposed digital imagery on our windshields - to cars that drive themselves. and a couple hours from now we will be seeing audi and their self-driving car. in 2013 we are going to see a flying car from terrafujia, out of massachusetts. so it is a really interesting time, and you will see at next week's detroit auto show even more technology under the hood, ranging from voice interaction and wireless communication with your mobile devices, to cars that will keep you awake by jolting you on the steering wheel, and other amazing innovations that we are going to see in the coming years. > now if we could just get a car that pays for your own parking tickets. marc saltzman, tech writer at usa today. thanks so much. > > thank you. cheers. still ahead, oscar buzz has already begun. find out what films are predicted to get a nod from the academy next, in movies and money.
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♪ ♪ ♪ ♪ ♪
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i served a total of 16 years. and at 19 years old, that's the first time i ever saw somebody die. coming back, i was raging. i started having pretty horrible nightmares. i started drinking a lot. i guess i never recognized it in myself. it all starts with going to the va. there's a whole community of veterans that just want to help you out. it's for the guys who couldn't come back, you owe it to them to live well. because they're not here with their families.
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it's an action-packed movies & money today. our movie man, erik childress, is here with a lot of ground to cover, starting with the oscar nominations. it's oscar nomination day. > > just a few hours away. > let's have a little oscar party. > > all right, let's do it. > let's take a look at your predictions. you have your list of who you think will win. let's start with the ladies. here is your list right now: jessica chastain, marion cotillard, jennifer lawrence, emmanuelle riva, and naomi watts. who wins? > > i think the race is coming out to jessica chastain verses jennifer lawrence. zero dark thirty has a lot of momentum right now. i personally have been in the pocket for jennifer
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lawrence for a while, but i think this is a very tight race. > here is your list for best actor: bradley cooper, daniel day-lewis, john hawkes, hugh jackman, denzel washington. i think daniel day-lewis is a sure thing. > > i think this is probably the second lock of the night after anne hathaway. > i am right behind you. let's talk about the oscar picks for the best movie. tough year to say the least: "zero dark thirty," "lincoln," "argo," "les mis," "silver linings," "life of pi,"django," "the master," "moonrise kingdom," and "beasts of the southern wild." > > we have that list you have laid out there, it's a list in sort of 1-through-10 order, because we don't know exactly how many films are going to be nominated. it could be seven, it could be 10, it could be eight, could be nine, we don't know. so that is my sort of list of the order i think has the best chance of getting in this year. > let's do a little talking about "zero dark thirty," because this is a big film that a lot of people will go to see this week, and there has been a ton of controversy about this, saying that it's taking a lot of liberties, some things didn't actually happen the way they did in the bin laden
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capture. what do you think? what is your critic's take? > > movies that are based on true stories are always going to take dramatic license and liberties. this is kind of a special case, because there is possibly classified/declassified documents that mark boal and kathryn bigelow had access to in order to make this film, to make it as detailed as possible. obviously a lot of people are sort of harping on the torture aspect of the movie, and whether it endorses it. that is pretty ridiculous, because it is just saying what happened. and if torture was a part of it, it is not endorsing torture any more than schindler's list was endorsing nazism. > i also wanted to ask you about "the impossible." it wasn't listed as one of the best pictures on your list, but it's getting a lot of buzz, and people say that although it's hard to watch, it's a great film- > > it really is a terrific movie, and i think naomi watts is going to be nominated for her role in the movie. the film, it opened last weekend a little bit wider. it just barely did better than "zero dark thirty" did on only 60 screens, so it's not really getting quite the push out there in the box office, but it is a movie that people should see. it's got some controversy itself because of them sort of focusing on a white family as opposed to the millions of thai folks who lost
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their lives during the 2004 tsunami. > it's a tragic topic. > > it really is. > here is what happened at the box office last weekend: "texas chainsaw" coming in at number one. "django" 2, "the hobbit" 3, "les mis" at 4, and 5, "parental guidance." coming up this weekend at the box office, "gangster squad," and "a haunted house." either one of those you like? > > not really. "a haunted house" didn't screen for critics. "gangster squad" is not a very good film. a film that you remember back in september was delayed because of the aurora shootings. but you also have "zero dark thirty" opening this weekend, that i think has been marketed quite brilliantly by sony. i think people are going to flock to it. i think it has a very good chance of actually taking the top january opening weekend of all time. > we will see you back here next week. thanks erik. > > thank you. goldman sachs is out of with a slew of stock it calls "sure things" for 2013. find out what a trader has to say about that. stick around.
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(woman) 3 days of walking to give a break cancer survivor a lifetime-- that's definitely a fair trade. it was such a beautiful experience. (jessica lee) ♪ and it's beautiful (woman) why walk 60 miles in the boldest breast cancer event in history? because your efforts help komen serve millions of women and men facing breast cancer every year. visit to register or to request more information and receive a free 3-day bracelet today. it was 3 days of pure joy. ♪ and it's beautiful
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matt cavanuagh of cmz trading joins us now, and this is a good one matt: goldman sachs is out with its list of stocks it said should pay in 2013. on that list there's coca-cola enterprises, wyndham resorts, and lowe's. you pick one of the stocks that you like from the list, tell us about it. > > i picked marathon petroleum. it's a really good company i think. they own pipelines, they own refiners, they own convenience stores. so they are really a good, basic energy and materials company. you look at them, they're pretty cheap on paper. they are looking about seven times forward earnings. and i think the big kicker here that goldman really nails is the yield. this stock is yielding about 2.3%, so you combine that with the stock's share repurchases that they are going to do, the cushion that the dividend yield is giving you; you look at that whole
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package and you say, "hey, these could be some really good companies." > also goldman is picking stocks that are products people use in everyday life. there is even a railroad company there. > > absolutely. i think that is the big kicker here. you look at this kind of environment where i would say that investment decisions are not so easy to make. we have a really low interest rate environment, and if you look at these companies that are woven into the fabric of our lives, companies that are going to benefit from strength in america or otherwise, and they're paying you a better dividend yield than the so-called risk-free rate of return, you might be ok. > it's almost a bet on the economy i would dare say. matt, good to have you on the show. > > thank you. time for us to sail out of here for today. coming up tomorrow: traders unplugged! find out if our trading pros think amazon stock is the next apple. from all of us at first business, have a terrific thursday!


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